3514 Farmdale Ave

Los Angeles, CA 90016

$1,250,000F

5 bd · 3.0 ba · 2,212 sqft · Built 1944 · MultiFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,051/mo
• Mortgage (P&I): −$6,555
• Tax + insurance: −$842
• HOA: −$0
• Vac / Maint / Mgmt: −$1,481
• Net cashflow: $-1,827/mo
• Annual: $-21,925/yr
• Cap rate: 4.54%
• Cash-on-cash: -6.26%
• DSCR: 0.72
• 1% rule: 0.56%
• Cash to close: $350,000

Investor read

• This is a 1×1bd/1.0ba + 2×2bd/1.0ba units multifamily listed at $1.25M.
• At list price, monthly cash flow is $-2k ($-22k/yr) — negative. Per door: $-609/mo.
• To cash-flow at today's rent, offer at most $927k (25.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $705k (43.6% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $705k (43.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $38k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#273 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment B; Watch: health & safety C-, crime F, cost of living F.
• Los Angeles Unified (urban): math 29% / reading 54% proficiency, ranked #223 of 517 in CA (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Coliseum Street Elementary (188 students, 97% FRL); Audubon Middle (407 students, 96% FRL); Valley Academy of Arts And Sciences (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 868 students, 64% FRL) — zoned schools average 86% FRL vs 67% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 150 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; 19,697 units permitted in Los Angeles County in 2024 (9,426 in 5+ unit buildings).
• Los Angeles County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $155k; list at $1.25M implies a 706% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.5% vs local median 2.1% in Los Angeles — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $7,051/mo this rent would consume 115% of the median local household income ($74k/yr) (locally 3450% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1944 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?